Bio-Technology General Corp. Announces First Quarter 2001 Earnings Results; Revenues Up 101%, Product Sales Up 139%
Net Income $9.5 Million Vs. $1.1 Million EPS $0.17 Vs. $0.02 (Exclusive of Certain Non-recurring Items)
Updated 7:30 PM ET April 16, 2001ISELIN, N.J. (BUSINESS WIRE) - Bio-Technology General Corp. (NASDAQ:BTGC) today reported pro forma income from operations of $9.5 million, or $0.17 per share, for the quarter ended March 31, 2001, compared to $1.1 million, or $0.02 per share, in the first quarter of 2000. These results are exclusive of the effect of the write-off, in accordance with generally accepted accounting principles, of purchased in-process technologies resulting from the acquisition of Myelos Corporation on March 19, 2001, and exclusive of the cumulative effect of the change in accounting principle relating to the recognition of contract fee revenues ("SAB 101"), in 2000.
Revenues and product sales for the first quarter of 2001 were approximately $34 million and $30 million, respectively, the highest such quarterly numbers recorded by the Company to date. Revenues and product sales increased 101% and 139%, respectively, from approximately $17 million and $13 million, respectively, in the first quarter of 2000. Product sales in the first quarter of 2001 accounted for 89% of revenues.
Sales of Oxandrin(R) increased 233% from $5.0 million in the first quarter of 2000 and 69% from $9.9 million in the fourth quarter of 2000 to $16.7 million in the first quarter of 2001. The increase resulted in part from sales of Oxandrin by the Ross Products Division of Abbott Laboratories in the long-term care sector, under a strategic co-marketing alliance with BTG and, in the case of the comparison with the first quarter of 2000, in part from Gentiva's completion of its inventory reduction in May 2000. Since the Ross launch of Oxandrin in late 2000, prescriptions for the product have increased dramatically. Oxandrin prescriptions in January and February 2001 were 27% higher than prescriptions in November and December 2000, and 37% higher than prescriptions in January and February 2000, respectively. Sales of the Company's human growth hormone, Delatestryl(R), and BioLon(TM) were $5.5 million, $5.3 million, and $2.2 million, compared to $4.0 million, $1.6 million, and $1.8 million, respectively, in the first quarter of 2000. BTG's sales of Delatestryl to Gentiva in 2000 were affected by a reduction of inventory by Gentiva in anticipation of the reintroduction of a competitor's product that did not materialize.
Pro forma expenses for the first quarter of 2001 were $19.8 million compared to $15.1 million in the first quarter of 2000. The increase in expenses was primarily due to a significant increase in the cost of product sales mainly as a result of the increase in product sales, and a substantial increase in marketing and sales expenses connected with the marketing of Oxandrin.
For the quarter ended March 31, 2001, including the effect of the write-off, in accordance with generally accepted accounting principles, of purchased in-process technologies resulting from the acquisition of Myelos, the Company recorded a net loss of $36.1 million, or $0.66 per share. In the comparable quarter of 2000, including the effect of SAB 101, the Company had a net loss of $7.1 million, or $0.12 per share.
Commenting on the results, Sim Fass, Chairman and CEO stated: "We are highly encouraged by the marked increase in product sales in the first quarter of 2001, and in particular by the significant growth in Oxandrin prescriptions. Most of the increase is attributed to the initial impact of our co-marketing alliance with Abbott. As a result of that alliance, approximately one-third of all Oxandrin prescriptions is currently being generated in the long-term care sector. Oxandrin is reaching many more individuals with involuntary weight loss and is beginning to achieve the broader market penetration we anticipated. We look forward to seeing additional growth in Oxandrin sales as the co-marketing alliance takes full effect. Given our robust earnings this quarter, we believe that our EPS growth target of twenty-five to thirty percent for 2001, exclusive of certain non-recurring items, is achievable and may well be exceeded."
First Quarter Developments
* On March 19, BTG completed the acquisition of Myelos Corporation, a privately held biopharmaceutical company focused on the development of novel therapeutics to treat diseases of the nervous system.
Myelos' technology platform enables the isolation of stimulatory peptides (short chains of amino acids) derived from growth factors. This has led to the development of Prosaptide(TM), a promising new compound for the treatment of neuropathic pain associated with diabetic peripheral neuropathy. A Phase II human clinical trial in Type I and Type II diabetes mellitus completed by Myelos demonstrated that Prosaptide effectively decreases pain associated with diabetic peripheral neuropathy without deleterious side effects.
Diabetic peripheral neuropathy is a serious and debilitating complication of Type I and Type II diabetes mellitus that usually affects the feet and legs. Symptoms include pain, numbness, and tingling. An estimated 8.8 million diabetics have peripheral neuropathy, while approximately 2.6 million of them have been diagnosed and are symptomatic. Due to the fact that available treatment options for pain associated with diabetic peripheral neuropathy are often unsatisfactory and frequently accompanied by unacceptable side effects, only approximately one-third of patients who are diagnosed and symptomatic are currently treated. BTG believes that the annual worldwide market potential for Prosaptide in the treatment of diabetic neuropathic pain may be in excess of $800 million.
Under the terms of the acquisition, BTG paid Myelos stockholders approximately $35 million in a combination of cash and stock (approximately $14 million in cash and $21 million in equity (approximately 2.3 million shares of common stock)). Despite this increase in shares, BTG anticipates being able to achieve pro forma EPS growth in 2001 over 2000. The shares issued to Myelos are unregistered. Although BTG has agreed to register them under the Securities Act, the principal stockholders of Myelos have agreed to limit their sale of BTG shares in any three-month period. This lockup agreement expires after two years.
An additional future payment of $30 million in a combination of cash and stock is contingent upon BTG being in position to file a New Drug Application for FDA approval of Prosaptide in the treatment of neuropathic pain. A final payment of 15% of worldwide net sales in the third year of commercialization will be made in a combination of cash and stock.
* In January 2001, The Ferring Group, BTG's licensee for Europe, received approval from the European Regulatory authorities for BTG's recombinant human growth hormone, in the treatment of Turner's syndrome. Turner's syndrome is a genetic disorder in girls that occurs in approximately 1 in 2,500 live births and results in short stature and failure to develop secondary sexual characteristics. Human growth hormone is effective in promoting growth and improving final height in girls with this condition.
Anticipated Developments in 2001
* Continuing growth in Oxandrin prescriptions and sales via the co-marketing relationship with Abbott
* Launch of BioHy(TM) in Europe by DePuy Orthopaedics, a Johnson & Johnson company
* Additional launches of Silkis(R) in Europe and Latin America by Galderma
* Approval and launch of recombinant human insulin in Poland and Eastern Europe by Ibatech
* Completion of Phase III clinical trial of Fibrimage(TM) by Draxis in the detection of deep vein thrombosis
* Initiation of Phase I clinical trial of Puricase(TM) in gout/hyperuricemia
* Initiation of Phase IIb clinical trial of OxSODrol(TM) in the prevention of reactive airway disease in premature neonates
* Completion of protocol design for Phase IIb clinical trial of Prosaptide in the prevention of pain associated with diabetic peripheral neuropathy
* Completion of pre-clinical development of anti-leukemia agent
Bio-Technology General Corp., a leading biopharmaceutical company, develops, manufactures and markets genetically engineered and other products for human health care. BTG's products are marketed worldwide. Products sold in the United States are Oxandrin(R) (oxandrolone, USP), marketed by BTG and by the Ross Products Division of Abbott Laboratories under a co-promotion agreement, Delatestryl(R) (testosterone enanthate), marketed by BTG, Mircette(TM) (oral contraceptive), marketed by Organon, Inc., and BioLon(TM) (sodium hyaluronate), marketed by Akorn, Inc. Products sold internationally are Bio-Tropin(TM) (recombinant human growth hormone), BioLon(TM) (sodium hyaluronate), Bio-Hep-B(TM) (hepatitis B vaccine), and Silkis(R) (vitamin D derivative). BTG's news releases and other information are available on the Company's website at www.btgc.com.
BTG will be offering a live webcast of a discussion by BTG management of the earnings and the Company's business on Tuesday, April 17, 2001, at 10:00 am (EST). The webcast can be accessed via the internet by going to BTG's website at www.btgc.com and via telephone by dialing 800-967-7141 (within the United States) or 719-457-2630 (from outside the United States). It will be archived and available after the discussion via our website through April 24, 2001. A replay will also be available for one week by calling 888-927-2816 (US) or 719-457-0820 (from overseas), passcode 794618.
All earnings-per-share amounts in the text of this news release represent diluted earnings per share as defined under Statement of Financial Accounting Standards No. 128, "Earnings per Share."
Statements in this news release concerning the Company's business outlook or future economic performance, anticipated profitability, revenues, expenses or other financial items; and statements concerning assumptions made or expectations as to any future events, conditions, performance or other matters, are "forward-looking statements" as that term is defined under the Federal Securities Laws. Forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from those stated in such statements. Such risks, uncertainties and factors include, but are not limited to, changes and delays in product development plans and schedules, customer acceptance of new products, changes in pricing or other actions by competitors, patents owned by the Company and its competitors, and general economic conditions, as well as other risks detailed in the Company's filings with the Securities and Exchange Commission.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands except per share data)
Three Months Ended March 31
2001 2001 2000(a)
Pro forma Adjusted Actual Actual
----------------------------------------------------------------------
Revenues:
Product sales $ 29,887 $ 29,887 $ 12,507
Contract fees 289 289 1,838
Royalties 843 843 635
Other 2,717 2,717 1,783
-------- -------- --------
Total revenues 33,736 33,736 16,763
-------- -------- --------
Expenses:
Research and development 5,930 5,930 5,397
Cost of product sales 5,139 5,139 2,336
General and administrative 3,277 3,277 3,446
Marketing and sales 4,741 4,741 3,256
Other 663 663 684
Write-off of purchased in-process
technologies -- 45,600 --
-------- -------- --------
19,750 65,350 15,119
-------- -------- --------
Income (loss) before income taxes 13,986 (31,614) 1,644
Income taxes 4,515 4,515 559
-------- -------- --------
Income (loss) before cumulative
effect of change in accounting
principle 9,471 (36,129) 1,085
Cumulative effect of change in
accounting principle -- -- 8,178
-------- -------- --------
Net (loss) income $ 9,471 $(36,129) $ (7,093)
======== ======== ========
Earnings per common share:
Basic:
Income (loss) before cumulative
effect of change in accounting
principle $ 0.17 $ (0.66) $ 0.02
Cumulative effect of change in
accounting principle -- -- (0.15)
-------- -------- --------
Net (loss) income $ 0.17 $ (0.66) $ (0.13)
-------- -------- --------
Diluted:
Income (loss) before cumulative
effect of change in accounting
principle $ 0.17 $ (0.66) $ 0.02
Cumulative effect of change in
accounting principle -- -- (0.14)
-------- -------- --------
Net (loss) income $ 0.17 $ (0.66) $ (0.12)
======== ======== ========
Weighted average number of common
and common equivalent shares:
Basic 55,117 55,117 53,748
======== ======== ========
Diluted 55,809 55,117 57,373
======== ======== ========
(a) BTG adopted the Securities and Exchange Commission's Staff
Accounting Bulletin No. 101 on Revenue Recognition in the
fourth quarter of 2000, effective January 1, 2000, and
recorded a cumulative effect of change in accounting principle
related to contract revenues recognized in prior periods. The
related revenue is being recognized over the terms of the
agreements.
news.excite.com |
